Updates to 2:26 PM ET

By Johann M Cherian, Sukriti Gupta and Chibuike Oguh

NEW YORK, March 3 (Reuters) - Wall Street's main stock indexes slipped on Monday after data showed a slight dip in U.S. manufacturing and as investors waited for President Donald Trump's decision on tariffs.

An ISM survey showed manufacturing PMI slipped to 50.3 last month from 50.9 in January, while the forward-looking new orders index contracted to 48.6 in February from 55.1 in January.

The dip in the PMI mirrored declines in other sentiment measures as Trump ratchets up tariffs on imported goods. The president is expected to decide early on Tuesday on tariff levels for imports from Canada and Mexico, following last-minute negotiations over border security and efforts to halt the inflow of fentanyl opioids.

"I think it's just more of a continuation of a string of bad economic news that tends to put a little bit of a dampener on the optimism that we saw from the fourth quarter earnings that were getting released, which were pretty good," said James St. Aubin, chief investment officer at Ocean Park Asset Management in Santa Monica, California.

"You've got a lot of policy uncertainty from Trump. Certainly layoffs are part of that but also the trade policy. I think that's all working against the positive sentiment forcing that sort of glass-half-full mentality into a back seat position and bringing out some of the bearish glass-half-empty mindset that comes and goes."

The Dow Jones Industrial Average .DJI fell 324.99 points, or 0.74%, to 43,515.92, the S&P 500 .SPX lost 45.58 points, or 0.77%, to 5,908.92 and the Nasdaq Composite .IXIC lost 214.33 points, or 1.13%, to 18,633.40.

Energy .SPNY and technology .SPLRCT sectors led declines among the S&P 500's 11 sectors, with most megacap growth sectors trading down including chip giant Nvidia NVDA.O - which is down 6.5%.

Defensive sectors such as Real estate .SPLRCR, healthcare .SPXHC and consumer staples .SPLRCS were trading higher.

Recent reports of softening consumer demand have spurred fears of an economic slowdown and higher inflation. Trump has threatened that an extra 10% duty on imports from China will also take effect on Tuesday, which could spark retaliation from Beijing.

U.S-listed shares of Chinese companies fell, with Nio NIO.N and JD.com JD.O off about 6% and 1%, respectively.

Worries about sticky inflation have made the Federal Reserve more cautious on interest rate cuts, but this week's employment and business activity data could change the central bank's view.

Traders have been betting on at least two 25 basis points worth of interest rate cuts from the Fed by December, according to data compiled by LSEG.

Tesla TSLA.O erased early gains and was down 2%. Morgan Stanley had reinstated the stock as 'top pick' among U.S. autos.

Chipmaker Intel INTC.O rose 0.6% after a report that chip designers Nvidia NVDA.O and Broadcom AVGO.O were running manufacturing tests with the company.

Declining issues outnumbered advancers by a 1.05-to-1 ratio on the NYSE. There were 178 new highs and 181 new lows on the NYSE.

The S&P 500 posted 57 new 52-week highs and 11 new lows while the Nasdaq Composite recorded 56 new highs and 296 new lows.

(Reporting by Johann M Cherian and Sukriti Gupta in Bengaluru and Chibuike Oguh in New York; Editing by Shinjini Ganguli and David Gregorio)

((johann.mcherian@thomsonreuters.com;))